Manhattan DA: ex-stockbroker indicted for theft of $780,000

ChadBray

NEW YORK (MarketWatch) -- A former Manhattan stockbroker was arrested Tuesday for allegedly stealing $780,000 that was advanced to him as a loan when he was hired by Merrill Lynch & Co., said Manhattan District Attorney Cyrus R. Vance Jr.

Steven Mandala, 29 years old, was charged in an indictment with grand larceny, money laundering, identity theft, criminal possession of a forged instrument and falsifying business records. He faces up to five years to 15 years in prison on the grand larceny and money-laundering charges.

Frank Rothman, a lawyer for Mandala, said his client pleaded not guilty to the charges at a hearing Tuesday.

"They loaned him the money and he didn't produce as well as he hoped and they hoped and was terminated in a few months," Rothman said. "They want the $780,000 back."

Prosecutors alleged that Mandala misrepresented to Merrill Lynch, prior to being hired in April 2009, that he was a partner at another firm, with $300 million in assets under management and that his work produced $1.5 million in revenue. He claimed to be earning $765,000 a year, but was actually earning $100,000 a year.

He allegedly produced false pay stubs, tax returns and W-2 forms in support of his claim, prosecutors said.

As part of his employment contract, Mandala received a loan of $780,000 to be paid back over an eight-year period.

Prosecutors said Mandala, less than a week after being hired, used $245,580 of the money to purchase a Ferrari in his father's name.

Over a two-month period, Mandala frequently didn't show up for work and only brought in two or three clients with assets of about $20,000, prosecutors said. He resigned by email on June 29, 2009, and asked Merrill Lynch to discard his personal effects, prosecutors said.

Among the items left at Merrill Lynch were credit cards in the name of his girlfriend's father, prosecutors said. Mandala allegedly had stolen the identity of his girlfriend's father and charged tens of thousands of dollars on those credit cards, prosecutors said.

Rothman said about $300,000 has already been seized in a separate civil action by Merrill Lynch and the Ferrari "will be returned." He said Merrill Lynch would then be short about $200,000 and some change "assuming a Ferrari holds its value for six months."

(Updates with statement from Merrill Lynch.)

NEW YORK (MarketWatch) -- A former Manhattan stockbroker was arrested Tuesday for allegedly stealing $780,000 that was advanced to him as a loan when he was hired by Merrill Lynch & Co., said Manhattan District Attorney Cyrus R. Vance Jr.

Steven Mandala, 29 years old, was charged in an indictment with grand larceny, money laundering, identity theft, criminal possession of a forged instrument and falsifying business records. He faces up to five years to 15 years in prison on the grand larceny and money-laundering charges.

Frank Rothman, a lawyer for Mandala, said his client pleaded not guilty to the charges at a hearing Tuesday.

"They loaned him the money and he didn't produce as well as he hoped and they hoped and was terminated in a few months," Rothman said. "They want the $780,000 back."

Prosecutors alleged that Mandala misrepresented to Merrill Lynch, prior to being hired in April 2009, that he was a partner at another firm, with $300 million in assets under management and that his work produced $1.5 million in revenue. He claimed to be earning $765,000 a year, but was actually earning $100,000 a year.

He allegedly produced false pay stubs, tax returns and W-2 forms in support of his claim, prosecutors said.

As part of his employment contract, Mandala received a loan of $780,000 to be paid back over an eight-year period.

Prosecutors said Mandala, less than a week after being hired, used $245,580 of the money to purchase a Ferrari in his father's name.

Over a two-month period, Mandala frequently didn't show up for work and only brought in two or three clients with assets of about $20,000, prosecutors said. He resigned by email on June 29, 2009, and asked Merrill Lynch to discard his personal effects, prosecutors said.

Among the items left at Merrill Lynch were credit cards in the name of his girlfriend's father, prosecutors said. Mandala allegedly had stolen the identity of his girlfriend's father and charged tens of thousands of dollars on those credit cards, prosecutors said.

Rothman said about $300,000 has already been seized in a separate civil action by Merrill Lynch and the Ferrari "will be returned." He said Merrill Lynch would then be short about $200,000 and some change "assuming a Ferrari holds its value for six months."

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